Experts have predicted that the Monetary Policy Committee will retain the benchmark interest rate and others at the end of its first meeting in 2022.
The Central Bank of Nigeria had disclosed that it would hold its next MPC meeting on Monday (today) and Tuesday.
At the last meeting in November 2021, the MPC retained the Monetary Policy Rate at 11.5 per cent; asymmetric corridor at +100/–700 basis points; Cash Reserve Ratio at 27.5 per cent; and liquidity ratio at 30.0 per cent.”
A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, said that the MPC would retain the current rates during its next meeting.
According to him, there has not been much activity in the economy because the year is still new.
“The first quarter cannot determine anything until second quarter. I think they should maintain all rates at the next Monetary Policy Committee meeting as they are because we don’t even know the direction during the first quarter now,” he said.
Analysts at FSDH Research, in their macroeconomic update report, recalled that the MPC had earlier in 2021 noted that the drivers of inflation in Nigeria were non-monetary factors, adding that the fiscal authorities needed to intensify efforts to address structural issues such as infrastructural deficit, security challenges, and high transport cost.
They said, “With this in mind, we believe that the MPC, in a bid to sustain economic recovery, will continue to favour economic growth over inflation targeting by further expanding credit to the private sector.
“The emergence of the Omicron variant and its discovery in Nigeria will adversely impact investors’ confidence following the implementation of travel bans by other countries. This will affect foreign investment inflows and could motivate the MPC to maintain a higher MPR in 2022 in order to attract investment into Nigeria.
“In view of the fact that higher MPR could hurt growth, we anticipate the retention of key parameters in the first half of 2022.”